Why is the crypto market down in 2024? – Forbes Advisor INDIA

The cryptocurrency market experienced a downturn, with the total market capitalization falling to $2.51 trillion over the last day from May 30, 2024. The market volume in the last 24 hours decreased by 9.22%. Bitcoin, the largest cryptocurrency, is currently trading at $67,659, down 2.82% over the past seven days and down 0.22% in the past 24 hours. Ethereum, the second largest cryptocurrency, is trading at $3,732, down 2.06% in the past seven days.

The cryptocurrency market is down today as fear mounts among investors after Mt. Gox’s $9 billion bitcoin transfer and the slowing inflows of the US spot bitcoin ETFs.

Let’s dig deep into it

How is the Crypto market performing?

The cryptocurrency market is experiencing a downfall, this could be due to the roughly $9 billion BTC being transferred from Mt Gox’s cold wallet to an unknown address. It probably went through thirteen deals, raising fears of market dumps. Another reason could be that the spot bitcoin ETF inflows are falling again.

The cryptocurrency market exhibits significant volatility, with prices fluctuating unpredictably. Currently, there is a downturn after Bitcoin surpassed its all-time high in March several times. The Dencun upgrade and Bitcoin halving did not bring the boom the market expected. Also, as people expected, the latest US SEC approval on the ETH ETFs did not bring any surge in the crypto world. As of the latest update, the Fear and Greed index stands at 61, indicating a state of greed.

The largest cryptocurrency by market cap, Bitcoin is down almost 2.90% in the last 24 hours and is trading at $67,598 as of May 30, 2024. On the other hand, Ethereum is down almost 2.27% and is trading at $3,726.

Let’s take a look at the reasons why the crypto market is down today

Crypto market analysts do not expect the Federal Market Committee (FOMC) to change interest rates as investors gradually get used to the fact that the US central bank may not cut rates at all this year.

As of May 1, 2024, the 11 Spot Bitcoin ETFs have seen a combined net outflow of approximately $563.7 million, the largest since the funds began trading on January 11. That extended a five-day losing streak, according to data source CoinGlass. Investors have withdrawn about $1.2 billion from the ETFs since April 2024. Also of note is that BlackRock’s iShares Bitcoin Trust (IBIT) experienced its first ever outflow this month, with nearly $36.9 million leaving the fund.

Additionally, Fidelity’s FBTC led to outflows, losing $191.1 million in withdrawals. This could be a panic situation for bulls, as BlackRock’s IBIT and FBTC continued to attract funds in the first quarter, more than compensating for the uniformly large outflows from the relatively expensive Greyscale ETF (GBTC).

Is Investing in Cryptocurrency Safe?

The cryptocurrency market has seen the good side as well as the worst of the market, be it post-Russia-Ukraine effects, Terra-Luna crash, FTX collapse or tightened tax regulation, it has weathered the worst storms in recent years experienced

The year 2023 gave a new beginning to the crypto world, with positive signs of recovery. Crypto investors believe that in situations like this, investing in stable digital currencies like Bitcoin and Ethereum in SIP format is a safe choice. Crypto experts believe that in the overall portfolio, investors should only look at investing just the 5% exposure to cryptocurrencies. The most important part is to invest only a small amount and not all your life savings as the market is highly volatile and there are chances of losing it all.

Steps on How to Invest in Indian Cryptocurrency Market

Step 1: Choose the best cryptocurrency: Choose a cryptocurrency you want to invest in. Like any other asset class, crypto has its own fundamentals and different blockchain networks supporting it, intrinsic value and mining techniques. Be sure to do your research and analysis before investing as the crypto market is very volatile.

Step 2: Choose a crypto exchange: After deciding on a cryptocurrency, it’s time to find yourself a perfect crypto exchange platform. It is a necessity to have a functional account in a crypto exchange that will help you buy and sell cryptocurrencies. Check out our article on the best cryptocurrency exchanges in India.

Step 3: KYC: Once you have selected a crypto exchange, you need to register yourself by providing personal details like name and address and complete the entire KYC formalities. After setting up your account, you are ready to invest in cryptocurrency.

Step 4: Choose payment mode: To buy a cryptocurrency, you need to choose a payment option that you are comfortable with. You can choose peer-to-peer, bank transfer, online payment mode or a crypto wallet.

Step 5: Buy cryptocurrency: After adding the funds to your account, you can buy the selected cryptocurrency smoothly. All you have to do is press the “buy” tab and you can easily buy the cryptocurrency of your choice.

Step 6: Storage: After buying the crypto coins, don’t forget to store your currencies safely because they are not regulated and you need to keep them safe as there is always a risk of hacking or theft. You can check the crypto storage options from here.

Step 7: Selling cryptocurrency: This is as important as buying because it helps you make money from investments. You can sell the cryptocurrency the same way you bought it, just click on the “sell” tab in your portfolio. You can sell your crypto investment fully or partially based on your choice, but don’t forget to book your profit in time.

Bottom line

It is a wise choice to observe the crypto market cautiously with the uncertain environment and slow recovery of macroeconomic situations in the world. Do not take any rash decisions as this is a good time to keep a close eye on the market and analyze it.

One may never know, but the observation will eventually help the investors to make smart decisions and may have a favorite digital asset at a fair value, once the chaos situation clears up completely.

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